Federal Court Rules Counsel Can't Authorize Student Loan Trust Settlement
Seven intervening parties opposed the proposed consent judgment, which would, if approved, have required the trusts to pay a minimum of $19.1 million in penalties and refunds.
June 08, 2020 at 06:38 PM
3 minute read
A federal judge has denied the Consumer Financial Protection Bureau's proposed $19.1 million-plus settlement with 15 Delaware student loan trusts, holding that the trust agreements didn't allow a law firm to sign off on the judgment's execution.
In a decision filed May 31 and unsealed June 3, U.S. District Judge Maryellen Noreika of the District of Delaware wrote that in order for the settlement to go forward, it would instead have to be approved directly by owner trustee, Wilmington Trust Co.
As part of an investigation of alleged unfair loan practices and an audit of 800,000 student loans, the CFPB first brought action against the trusts, collectively known as the National Collegiate Student Loan Trusts, on Sept. 18, 2017. The bureau moved for approval of a proposed consent judgment the same day.
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